Average cost for not-so-average homes up 1.5% to nearly $3 million in Bay Area

Housing prices for the wealthy in the Bay Area rose slightly last year, with the average price of a luxury home hovering at $2.92 million in the last three months of 2006, according to a survey released Wednesday.

First Republic Bank, which conducted the survey, said the price represents a gain of 1.5 percent compared with the fourth quarter of 2005. The bank evaluates luxury home prices based on an index created in 1985 that included homes valued at about $1 million.

By contrast, the median price of an existing home in the Bay Area was $640,000 in January, according to DataQuick Information Systems.

A relatively tight supply of high-end homes is helping to sustain prices, said David Lichtman, First Republic’s chief credit officer. “There’s not a lot of new housing stock being created and not a lot of empty land in San Francisco to build homes on,” he said “That helps keep prices up.”

Aldo Congi, a vice president at McGuire Real Estate, agreed. His firm has found few homes on the market in the $2 million to $4 million range, which is good news for sellers of such homes.

“We’ve been telling our agents to tell their buyers to put their property on the market now and they’ll be the only ballgame in town,” Congi said. “The buyers are out there.”

Still, the survey wasn’t all good news for luxury home sellers. While prices rose between 2005 and 2006, the survey found that the average price of a luxury home actually slipped 1.5 percent between the third and fourth quarters.

Although the housing market is typically slower in the fourth quarter because of Thanksgiving and Christmas, it was the first quarterly decline since 2004, First Republic said. The survey tracks housing prices in eight of the nine Bay Area counties, with Solano County excluded.

Mark Allan Levinson, an agent with Alain Pinel Realtors who is selling a $25.9 million home in Sea Cliff and a $12.5 million house in Pacific Heights, said there weren’t many sales in the high-end market last year.

He said 2007 is starting out a bit brighter, noting that he’d received a number of calls from qualified buyers for the Sea Cliff property. That house was recently put back on the market after the seller completed a three-year renovation project.

Luxury homes typically take much longer to sell than less-expensive ones, Levinson said.

“In general, expensive property is going to be on the market for awhile,” he said. “Six months is not unusual.”

Source:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/22/BUGT9O8MHG1.DTL&hw=housing&sn=005&sc=444